The overall goal of Project 3 is to develop a method to efficiently and reproducibly differentiate induced pluripotent stem (IPS) cells into hematopoietic stem cells (HSCs). Aim 1 of this project will determine the best conditions for the mesodermal differentiation of iPS cells and the generation of HSCs. This aim will test the hypothesis that an engineered human stromal cell line offers the best method to reliably differentiate IPS cells into hematopoietic precursors. Experiments will compare methods of differentiating IPS cells using embryoid bodies (EB) cultures and stromal cell lines to support the differentiation of IPS cells into HSCs. Various elements of these two differentiation methods will be studied to determine the best method to promote mesodermal differentiation and HSC creation. The second aim is to determine the optimal cytokine conditions for the survival, growth and expansion of HSCs generated from iPS cells. This aim will test the hypothesis that HSCs generated from IPS are more similar in their cytokine responses to fetal HSCs than adult HSCs. Accumulation of HSCs in culture requires conditions that favor their survival and minimize their differentiation into committed progenitors. Various cytokines known to play a role in the early stages of hematopoiesis will be tested in combination to compare the similarity of HSCs generated from iPS cells to those isolated from fetal tissues, umbilical cord blood and adult peripheral blood. These experiments will optimize culture conditions for the production of HSCs. The third aim will determine the variability in the capacity of different IPS cell lines to differentiate into HSCs. This aim will test the hypothesis that different iPS cells lines are similarly capable to form HSCs that can generate long-term multilineage reconstitution in immunodeficient mice. This aim will test isolated HSCs derived from multiple IPS cell lines for their capacity to provide long-term reconstitution without teratoma or leukemia formation, chromosomal abnormalities or other obvious functional deficiencies. The outcome of the experiments will be development of technology to efficiently generate transplantable HSCs from genetically corrected IPS cells.